ITT Corporation (ITT) has been making consistent efforts to strengthen its operational efficiency by executing diligent operational and cost-cutting initiatives. This is significantly fueling the company’s productivity.
The company has directed its organic investments toward enhancing the efficiency and effectiveness of its Motion Technologies business. This apart, the company has been improving its auto brake pad manufacturing and aftermarket-reaching capabilities in the Industrial Process business.
Furthermore, the company has strategically diversified its business across various sectors and regions in order to mitigate the operating risks related to economic downturns involved in operating a single sector or region. Moreover, over the past few years, ITT has been leveraging the Lean Six Sigma program to realise operational excellence through its restructuring initiatives and global sourcing efforts.
However, strong competition, especially in pump and valve markets, remains a concern. Besides, weak demand in the defense and connectors markets can weigh upon the company’s financials, going forward. In the last reported quarter, weakness in the short-cycle base pumps and industrial valves led to a 7% decline in the revenues from the company’s chemical and industrial pumps divisions. Also, the company’s Interconnect Solutions business has been witnessing persistent sluggishness since the last few quarters.
A deeper insight on ITT can be obtained from our most recent research report issued on Jan 8, 2015.
ITT currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Swire Pacific Limited (SWRAY), Compass Diversified Holdings (CODI) and Kadant Inc. (KAI), each carrying a Zacks Rank #2 (Buy).
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